Sending motorists mobile gas coupons as they pull up to pumps lures them into stores

A major goal for U.S. National Oil & Gas Inc. is to encourage motorists who pump gas at its stations to come into adjoining convenience stores to make additional purchases, says Trent Moser, owner and director of the company. So in the last quarter, National Oil tested a new technology from vendor iSign Media Corp. to entice those customers inside by sending them a mobile coupon for a discount on their gas—redeemable at the cash register only—as they pull up to a store, he says.

Of the more than 150,000 customers National Oil sent coupons to during three months, enough redeemed them to justify the retailer starting a rollout of iSign offers to 200 of its nationwide stores, Moser says. He declines to reveal the exact response rate. Another gas station and convenience store chain in Canada that has been using the technology has a response rate between 10% and 30% among the one million consumers it sends coupons to each day for 10 cents off per gallon, says Alex Romanov, iSign’s founder and CEO.

ISign provides retailers with an antenna that broadcasts a signal in a roughly 300-foot radius. When a mobile device enters that range, the antenna notes the device’s unique serial number. Similar to tracking a computer’s IP address, that number allows iSign to record the device’s movement in the broadcast range and note its interactions with mobile offers anonymously, as it does not collect any personal information about the owner. If the device has enabled Bluetooth or Wi-Fi, iSign sends it a mobile offer on behalf of the merchant. The offer can be in a variety of formats, such as a bar code, image, video or link to a web site. Should the customer accept it, the offer downloads to her device, Romanov says.

“If you advertise on radio or TV, you’re saying, ‘Try to remember to take advantage of this,’” he says. “Our method is more effective, faster, convenient and flexible.”

Regardless of whether a customer accepts the offer, iSign is able to anonymously track her response, her time at the store and, if the retailer has the offers linked to its point-of-sale system, her purchases and basket size, Romanov says. Because iSign has collected the device’s serial number, retailers using the antenna can also track when customers return to the store and adjust the offers it sends to them based on their previous responses, he says. For example, if a smartphone owner keeps declining offers for ice cream when he visits a store each day, the merchant can try sending him an offer for hot soup instead. Retailers can watch customers interact with the offers as they happen through a web-based dashboard and make adjustments as frequently as every four minutes, he says.

Keeping precise location information and storing it—as iSign does—could present a privacy problem if the vendor isn’t careful, says Alan Chapell, president of privacy and data collection advisory firm Chapell & Associates and co-chair of the Mobile Marketing Association’s privacy committee. That’s because research has shown that, even collected anonymously, certain amounts of precise location information can sometimes identify individuals, he says. ISign is confident that it is following all laws and regulations in this regard, Romanov says, including tracking and storing only anonymous information about consumers’ devices—not the consumers personally—within only the 300-foot area.

Retailers pay a flat fee to use iSign’s mobile technology, on average $150 per month per store, Romanov says. Roughly 2,000 locations, including restaurants, retail stores and gas stations across the United States and Canada, use iSign, he says. The vendor is working on building further capabilities for merchants to create loyalty programs and use them to personalize the mobile offers they send.